Economic Week

WITH the current uncertainty over the future direction of interest rates, the Bank of England's quarterly inflation report, published this Wednesday, is likely to gain considerable attention.

But many economists believe the bank will simply tread water until more information is available to make a judgment on how strong and sustainable any recovery is likely to be.

The inflation figures themselves are released the previous day, with more analysts expecting a rise in the headline RPI rate from last month's 0.7pc to close on 1pc for January. That would reflect the sharp fall in petrol prices in January last year, a different timing to the annual rise in vehicle taxes, and the impact from rising house prices. All this is likely to mean a similar-sized jump in the underlying RPIX rate from 1.9pc to about 2.1pc.

Wednesday brings publication of labour market data. Unemployment is forecast to have risen again, with the claimant count up by 7,000 over the month, lifting the rate slightly from 3.2pc to 3.3pc. Average earnings are forecast to continue their downward trend, with the annual growth rate falling from 4.2pc to 4.1pc.

The British Retail Consortium's retail sales monitor is out today. Expect a slowdown in the rate of sales growth. Producer price information for January is forecast to show continued cost and pricing pressures.